1982 (7) TMI 178 - AT - Wealth-tax

Summary

Issues involved: Appeal against levy of penalty u/s 18(1)(a) of the Wealth-tax Act, 1957 for default in filing returns of net wealth within prescribed time.

Summary:
The appeals by the department challenged penalties imposed on the assessee for not filing wealth-tax returns on time. The assessee claimed ignorance of the law as a reasonable cause for the delay, stating he only filed after learning about the Voluntary Disclosure Scheme (VDS). The department argued ignorance of the law cannot excuse the default. The Tribunal considered the credibility of the assessee's claim, noting his lack of prior income tax assessments and the recent extension of wealth-tax to agricultural properties. The Tribunal discussed the principle that ignorance of law is no excuse, acknowledging its limitations in a complex legal system. Referring to legal precedents, the Tribunal emphasized that penalties should not be imposed for technical breaches or when there is a bona fide belief of non-liability. Ultimately, the Tribunal upheld the cancellation of penalties, finding the assessee had a reasonable cause for the delay in filing returns. The department's objections were rejected, and the penalties were dismissed.

This judgment highlights the importance of considering the circumstances and knowledge of the taxpayer in penalty cases, especially in complex legal systems where compliance may be challenging.